Domestic car production should be seven times higher than current figures to make Russia an attractive country for the mass transit industry plastics production.
On Tuesday 28 June Creon`s third Conference "Plastics in Mass Transit Industry 2011" was held in Hotel Baltchug Kempinski Moscow. The event was supported by the partners "SABIC Innovative Plastics" and "Polyplastic" Group. Car production never was the main area of plastics` application, but new requirements for engineering and performance polymers provide powerful impetus for the industry`s technological progress. But according to "Creon" CEO Sandjar Turgunov, at the same time it becomes more and more difficult to be optimistic about the industry`s future, because the domestic mass transit industry perspectives are unclear and prospects of plastics in this industry too.
The "NAPAK" Executive Director Mikhail Blokhin devoted his report to the automotives` manufacturing localization problems and prospects, as one of the most perspective way of plastics` usage in transport. According to the speaker, this market in Russia and all over the world is completely determined by car manufacturers` plans. A lot of them decided to set up joint ventures with local companies instead of creating components production in Russia and to meet localization requirements this way. The industry is divided a long time ago into individual car assembly and auto components` manufacturing, but in Russia they are still integrated with each another as over 60% of auto components in the country are produced by their own motor factories. The quality of the components on the secondary market often exceeds the original parts. Foreign companies` production localization is mainly applied to large parts and assemblies expensive in transportation, but the problem in localization of individual components of the second and third level still exists despite the fact that tax preferences for industrial assembling were expanded on automotives in 2005. It is estimated that any necessary details production needs a market volume near 700 thousand units, while for every foreign company this figure in Russia is seven times less. Meanwhile, according to signed agreements between car producers, the localization rate should be 60% by 2020, but it won`t be above 20-30% without local raw material resources. Now in Russia while a share of modern vehicles in the fleet is 50%, the share of modern car parts in production volume is only about a quarter, and the share of modern materials, including polymers that are used for the production of such parts does not exceed 15%. The speaker proposed to revise the parameters of localization of production and make it smoother: by 2014 the level of containment should be 15% by 2017 - 30% in 2020 - 45%.
Mikhail Katsevman, Science and Development Director of Polyplastic Group, considers production localization of automotives by Western companies to be important strategy of market development in automotive industry. But it would be more correct and useful to create own domestic manufacturing of automotive parts instead of waiting for Western companies to bring their suppliers here. According to Mr. Katsevman, plastic materials market for automotive industry grows by 15-20% per year and similar growth rates are observed on general polymer materials market. At the same time, contamination of polymer materials in one car, in terms of their weight, decreases visibly, mainly due to quality increase of such materials and design. In Russia, last year, 1.8 million cars were sold and only 1.2 million were assembled, and according to forecasts, production volumes will return to pre-crisis level only a few years later. However, even in this case, polymers` consumption in automotive industry will not exceed 80 thousands tones per year, what is close to present polymers` composites output for all industrial uses by Polyplastic (60 thousands tones) only. That`s why leading world car manufacturres prefer to invest in Eastern European countries, which operate on EU common market where the demand volume is 22 million of cars per year, than in Russia. Domestic producers, in terms of internal market narrowness, have no other way except searching the ways for coming to world market. However, global cars manufactures don`t hurry to review global contracts in favor of Russian suppliers. According to Mr. Katsevman, requirements for Russian products are much stricter than to foreign ones and to implement it, companies must increase purchases of expensive foreign additives that lead to its competitive characteristics decrease. Domestic suppliers of polymer raw materials (primary, polypropylene and polyethylene) not always can support them due to small volumes. And after all in Russia prices for raw materials change based on world market conditions, while its quality and diversity remain consistently low. As a result, Russian products cost just 5-8 % lower than European analogs and it`s clearly not enough for rapid business development. Polymer composites manufacturing for automotive industry, the representative of Polyplastic, whose main business is plastic pipes production, compared with hobby as an company`s expenditures on market development don`t match with achieved results.
Head of Direction of SABIC Innovative Plastics Bernd Springler told the audience about company`s new products for interior design of rail and road transport. The main requirements for them are lightness, fire safety, design latitude, easy coloring and resistance to graffiti. A wide range of interior parts, including performance wall and ceiling panels, armrests and back seats, lighting lamps, curtains, train windows are made of SABIC`s polycarbonate. In Russia Company manages negotiations with potential clients for two years, however, it can`t report about major contracts yet.
Anatoly Eidinov, CEO deputy of NAMI told about prospects of polymer materials usage in trucks. According to him, polymers` usage reduces weight of separate parts by 40-70 % and more. Now innovative decision is designed, for example, for usage of fiberglass plastics in separate part of truck that can significantly reduce noise level and fuel consumption. In general, plastic share in total weight of trucks already reaches 10% and car weight reduce by 10 % leads to decrease of fuel consumption by 7%. Now Institute`s developments have been already presented in test production of trucks. Event participants, however, doubted that it was appropriate to use fiberglass polymer and carbon fiber polymer parts which are not recyclable and can not meet ecological rules requirements. Cars manufacturers` representatives told about promotion of polymer materials introduction on its factories in Russia. According to Alla Basaeva, Bureau Chief of polymers of AvtoVAZ, mass production start of Lada Granta is planed on this year. Latter will content about 60-70 kilogram of polymer materials, primary polypropylene compounds. Although particularly stringent requirements for polymers are not made, simple and affordable grades are used. Sergey Karasev, Engineer Testing Laboratory of Volkswagen told about absence of company`s requirements differences to components` suppliers in Russia and in other countries. The company has already begun to use bumpers and plates, made in Russia. Timofey Yesaulov, Procurement Specialist of Industrial Materials of Ford Motor, reported that due to the end of Ford Focus basic model production usage of domestic components has been ceased, and localization cycle of new model production has been started over. At the same time the problems are the same: it`s hard to get the reaction from components suppliers for requirements imposed. Aleksey Grigoriev, Automotives Supply Development Specialist of Peugeot, noticed that due to not enough volumes of production it`s too early to say about localization of automotives in Russia. Vladimir Smolentsev, Head of Engineering Materials of Renault, told that company tried to build a new work scheme with AvtoVAZ, used domestic polymer compounds, but they hadn`t its own polymer raw materials, while producers of raw materials in Russia are not interested in such small market. Finally, recycled polymer materials are not produced at all in spite of the fact that company must use it under assumed global environmental commitments.
In spite of the problems mentioned above, many domestic companies, State and Scientific structures are under great interest in creation of polymer automotives productions. Ivan Chernyshev, Expert of Management of relations with residents of special economic zone "Alabuga" in Tatarstan told about car manufactures` work experience with special tax regime in this area. Special economic zone project operates since 2008 and attracted more than 1.5 billion dollars of investments for this period, now 60 % from 20 square km in the zone are occupied. One of the "anchor projects" in SEZ territory are the projects of Sollers and Isuzu, car manufactures. Recently, Ford joined them, which investments volume in the place is accounted in 1.4 billion dollars. On the zone`s territory three producers of polymer automotives work and appearance of new ones is expected. Important competitive advantage of SEZ Alabuga is developed infrastructure and proximity to both main centers of car production and main polymer materials suppliers of Russia.
Liana Shoranova, Scientific Employee of Makpolymer told about experience production of nanocomposites on the basis of polybutyl terephthalate, which can be used as the finished materials in aviation and car industry. Share of PBT in the structure of engineering plastics` world consumption growing constantly and now it`s already 18%. In Russia 8.5 thousands tons of this polymer are consumed annually while in the world this figure is 1 million and, according to forecasts, this figure will double within 5 years. Russian automotive industry alone can potentially consume more than 35-40 thousands of composites on the basis of PBT. Investment project to creation of composites production, with capacity of 10 thousands tons per year, is designed in Kabardino-Balkaria. However, project implementation is impaired by absence of raw materials (butandiol) in Russia and lack of financial resources.
According to Fares Kilzie, Head of Creon, for successful running business in polymer industry for automotive and aviation industry it`s necessary to cooperate with transnational companies, which is not possible until Russia enters to WTO with full withdrawal of all formal technical barriers between the players. Another way is to close the borders completely and to design one universal "people car" and one "people airplane" and to create for this own automotive (including polymers) suppliers. But the country already used to go this way once.